1. Field of the Invention
The subject disclosure is directed to a system and method for effectuating a transaction involving financial instruments such as fixed income securities, and more particularly, to a system and method for conducting a risk analysis on a fixed income security and subsequently initiating a trade of that security.
2. Background of the Related Art
Portfolio managers typically conduct various complex analyses prior to engaging in a transaction (also referred to as a “trade”) involving financial instruments for the portfolios in their care. The term “portfolio managers” as used herein generally refers to the agents that have the authority to buy or sell financial instruments for one or more portfolios of financial instruments owned by others.
The analyses are primarily directed towards risk management of the portfolio, which includes generating hypothetical models of various transactions involving financial instruments prior to actualization. For portfolio managers, the task of understanding a wide range of financial instruments and efficiently managing multiple portfolios against numerous benchmarks in a risk controlled fashion demands significant resources and expertise. It is an established sound investment practice to minimize risk and maximize return by maintaining a portfolio of diverse assets of different type and class. Thus, attractive opportunities among all assets must always be sought, and also, carefully investigated prior to their purchase.
Typically, the analyses involve user-specified variables entered through a Graphical User Interface (GUI). The results are used by the portfolio manager to make investment decisions and/or develop investing strategies. Thereafter, the portfolio manager must transact (i.e., buy or sell) the desired financial instruments. This may also involve entering information in a GUI. The process becomes time intensive and cumbersome when the portfolio manager has to use different computer programs (e.g., transferring from a risk analysis program to a program for facilitating trades via the world wide web) to re-enter information regarding portfolios and financial instruments previously analyzed. It is further complicated in that many transactions are applied across multiple portfolios at once. Furthermore, the portfolios must be updated to reflect the transaction. Often, the volume of transactions involving different financial instruments within any given day may be extremely high. There may be thousands of trades affecting thousands of portfolios under the portfolio manager's care.
Accordingly, there is a need in the art for a system that provides analytical capabilities and the ability to conduct transactions for multiple portfolios of diverse financial instruments, such as fixed income securities and derivatives, in a more integrated and efficient manner.